WASHINGTON (AFP) -- President George W. Bush vowed the United States will never run from Iraq, after 16 soldiers were killed, while the U.S. Congress approved Monday his request for 87.5 billion dollars to stabilize and rebuild both Iraq and Afghanistan.

The bill gave Bush virtually everything he asked for when he made the funding request in early September. Efforts to make part of the U.S. aid to Iraq a loan failed.

Some 64.7 billion dollars has been earmarked to pay for U.S. military operations. Another 21.2 billion dollars is for the reconstruction and rehabilitation of Iraq and Afghanistan.

"These resources, coupled with the growing assistance of international donors, will provide essential support to make Iraq more secure and to help the Iraqi people transition to self-government," Bush said in a statement.

In Iraq, villagers in the town of Albu-Isa gloated and celebrated as U.S. troops scoured the wreckage of the downed helicopter where 16 soldiers were killed and 20 injured Sunday just south of the city of Fallujah.

"It's party time for us," said farmer Ahmad al-Issawi, summing up the bellicose mood after the worst single attack on U.S. forces in Iraq since they entered the country in March. "If the resistance carries on like this, the Americans will leave Iraq."

Bush, however, said the United States will not be intimidated.

"The enemy in Iraq believes America will run. That's why they're willing to kill innocent civilians, relief workers, coalition troops. America will never run," Bush vowed during a speech in Alabama.

The relations with U.S. troops, tenuous at best, are often on knife's edge around Fallujah, 50 kilometres (30 miles) west of Baghdad, as insurgents ambush soldiers on the roads, and locals nurse bitter grievances against the U.S. military.

"If one U.S. soldier is killed we'd be happy, so imagine how we feel now," said a smiling young man named Hadi, surrounded by 20 men nodding in agreement.

The daring attack on the helicopter came on what insurgents had billed as "black Sunday", the final day of a so-called weekend of resistance, where Iraqis kept their families at home, terrified of bombings.

U.S. Defense Secretary Donald Rumsfeld said the chopper was probably downed by a surface-to-air missile.

Hundreds of the portable missiles, mainly Russian-made SA-7s, are said to be scattered around the country, available to insurgents from poorly guarded arms depots that are a legacy of Saddam Hussein's regime. Another U.S. soldier died in a bombing in Baghdad, and two U.S. contractors working with the U.S. Army Corps of Engineers were killed by a roadside bomb in Fallujah.

The deaths raised to 139 the number of U.S. troops lost in Iraq since May 1, when Washington declared major combat over, according to an AFP count based on a previous toll provided by the Pentagon.

A member of a Baghdad neighborhood council sponsored by the Americans was killed in a drive-by shooting, the U.S.-led coalition said.

The fatal shooting was the third assassination of a pro-U.S. Iraqi political figure in the past eight days.

The announcement came as Muhan Jabr al-Shuwaili, the top judge in the central province of Najaf, was shot dead after an apparent kidnapping.

Shuwaili was behind the creation of a judicial commission to probe former officials of Saddam's ousted regime.

A U.S. soldier meanwhile was wounded by small arms fire and a bomb attack on a military convoy near Samarra, 110 kilometres (70 miles) north of Baghdad, near Saddam's hometown of Tikrit, witnesses said.

Three mortars also hit central Baghdad, including one that landed at a U.S. army facility, with no casualties reported.

And three Iraqis were wounded as a booby-trapped device exploded near a hotel in the Shiite Muslim holy city of Karbala, 110 kilometres (70 miles) south of Baghdad, witnesses said.

Karbala was the scene of high tension between Shiite groups in mid-October, when supporters of Grand Ayatollah Ali Sistani blocked backers of radical cleric Moqtada Sadr from taking control of the Hussein and Abbas mausoleums.

At least one person was killed in armed clashes between the rival groups.

Meanwhile at the United Nations, Secretary General Kofi Annan said the withdrawal of international UN staff from Baghdad was almost finished, and that changes in security procedures were already under way.

The few staff remaining in the Iraqi capital are being sent to Cyprus while the world body reviews security in Baghdad after a scathing independent report found a litany of failures in UN safety procedures within Iraq.

Annan ordered the pullout last week after a car bombing at the International Committee of the Red Cross in Baghdad killed 12 people on the heels of a similar attack August 19 at the UN's Baghdad offices that left 22 dead.